The dynamic relationship between resources, finances, and sustainable development: An in-depth analysis

Abstract

The expansion of the economy and the use of natural resources have been identified as the main causes of environmental degradation. As a result, there is a need for sustainable and environmentally-friendly growth. However, the concept of "pollution havens" is becoming increasingly relevant, with businesses relocating to developing countries in search of more lax environmental regulations. This could lead to higher-than-desirable rates of pollution and environmental damage. To address this issue, this study assesses the role of natural resources (NTR), Foreign Direct Investment (FDI), Financial Development (FDT), and Green Finance (GFN) using QARDL analysis. The study found that NTR, FDI, and FDT increased CO2 emissions, while GFN reduced them in the short and long run. The findings provide valuable insights for policymakers, who can use the information to develop policies that promote economic growth while reducing environmental pollution. Additionally, the study highlights the need to prevent businesses from exploiting lax environmental regulations in developing countries. Overall, the findings of this study underscore the importance of balancing economic development and environmental sustainability and call for the prioritization of green initiatives in policy development.